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LONDON (Alliance News) - Savills PLC Tuesday said it is to acquire the business and assets of Smiths Gore for up to GBP40 million in cash.
In a statement, Savills said the GBP40 million deal is expected to close in the third quarter of 2015 and will boost its underlying earnings per share from the first year.
"This transaction will enhance the enlarged Savills business' ability to serve the UK's landowners with national coverage and a full portfolio of management, agency and asset management services," Savills Chief Executive Jeremy Helsby said in a statement.
Smiths Gore, a partnership that provides rural property services in the UK, has 27 partners and 532 staff. Founded in 1847 and headquartered in Peterborough, England, Smiths Gore generate revenue of GBP30.8 million in the year ended March 31, 2014, Savills said. The acquisition's pretax profit before partners' drawings amounted to GBP6.3 million.
Savills said it will use its existing borrowings and cash to pay for the acquisition. It will pay GBP12.5 million on completion and up to GBP8.5 million for net current assets.
Up to GBP16 million of the payment is being deferred until the three years after completion of the acquisition, followed by a payment of up to GBP3 million two years later, depending on whether performance targets are met.
Savills shares were up 0.7% at 831.00 pence on Tuesday.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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